03:01 PM EDT, 07/26/2024 (MT Newswires) -- Zoom Video Communications ( ZM ) is facing "growth pressures" amid tough competition and a maturing communications software market, UBS Securities said in a note emailed Friday.

Zoom's growth is significantly impacted by competition from Microsoft ( MSFT ) Teams due to customers' preference for the latter's functionality "especially given this tight spending environment," UBS said.

The communications software market, including video conferencing, "remains crowded with limited greenfield opportunity," leading to price competition, according to the note.

The company's artificial intelligence features are highly regarded, with one industry partner expecting customers to pay for these features, which could be a significant growth catalyst for the stock, UBS said.

Zoom shares are down 17% year to date and are seeing reduced investor interest as the market takes a "risk-off" approach towards software-as-a-service names, UBS said.

The investment firm reduced the price target on the company's shares to $68 from $75 and reiterated its neutral rating.

Price: 60.10, Change: +0.49, Percent Change: +0.82